Clothing and home products retailer Deacons Kenya has issued a profit warning saying it expects earnings for its full-year 2016 to be lower by at least 25% compared to earnings reported in the same period in 2015.
The company which listed on the Nairobi Securities Exchange on 2nd August 2016 attributed the expected decline in profits on lower Christmas trading season in 2016 and went ahead to give a lame excuse;
“The drop in profits was primarily occasioned by the delayed openings of Adidas, Bossini and F&F Stores at the Hub, Karen and the postponement of the launch of the Two Rivers Mall to February where the company was fully invested and ready to trade in four flagship stores by September 2016”
Deacons posted a loss of before tax of Ksh 70.2 million during the half year 2016 period with finance costs increasing by 79.5% to Ksh 46.8 Million.
READ; Deacons posts Ksh 70 Million Loss two weeks after listing on NSE
Deacons recently signed signed an exclusive franchise agreement with F&F, a fashion subsidiary of UK’s Britain’s largest grocery and general merchandise store Tesco. With this agreement, Deacons was to acquire the regional franchise rights for the F&F fashion brand that caters for men, women and children.
The company also has distribution agreements with German sporting-goods maker Adidas AG and South African retailers Mr Price Group Limited, Truworths International Limited and Woolworths Holdings Ltd.
Related;
Sanlam Kenya Issues Profit Warning for the second year in a row
Nairobi Bourse issues Profit Warning for the first time since Self-Listing
Share Price
After listing 123,558,228 shares on the Nairobi Securities Exchange through introduction on 2nd August 2016, the counter closed the year at Ksh 6.05, which is -59.67%% from its listing price of Ksh 15 per share.
